The sites use similar or slightly amended domain names which imply that they are affiliated to organisations such as Citizens Advice, Advice UK, National Debtline or the Consumer Credit Counselling Service. Some of the website names also imply that they have some official status or sanction from the Government.
Parts of the content of these 'look alike' websites are often copied from legitimate sites offering free advice, despite the companies involved charging fees.
The OFT has told the companies to stop using the trading names immediately and for those companies who were trading without a licence to stop trading completely or face prosecution. The OFT is also working closely with internet service providers to ensure that the websites are taken down promptly.
The action followed complaints from a number of debt advice charities including Citizens Advice.
Consumers are advised to take particular care when searching for terms such as 'citizens advice' or 'government advice' to ensure that they are dealing with a genuine charity-based help and advice service. Consumers should also be careful not to deal with traders who are unlicensed.
Most businesses that offer credit or lend money, including those that offer advice on debt, must be licensed by the OFT and they must notify the OFT of all the trading names they intend to use. Trading names should not be misleading or otherwise undesirable. Failure to comply with an OFT warning can result in a business being subject to licensing action or criminal prosecution for unlicensed trading.
Ray Watson, OFT Director for Consumer Credit said: 'The OFT will take action against businesses that use 'look alike' websites to mislead consumers into believing they are dealing with established charitable or not-for-profit organisations.
'Consumers are also reminded that they should not deal with any company that does not have a consumer credit licence. These unlicensed businesses are unregulated and consumers may have no means of redress if things go wrong'.
Citizens Advice Director of Public Policy, Teresa Perchard said: "We are really pleased that the OFT has taken action to close these websites which have been misleading the public by marketing themselves on the back of extremely well known and well trusted charities and government information services. Instead of free impartial debt advice consumers could find themselves charged fees, sold products or offered a paid-for debt management plan. In addition, some of these sites have no information about whether the company or any of the advisers the site refers the consumer to hold a credit licence or are qualified to help them.
"Although many consumers might not get taken in once people have provided information on these sites they will get a phone call and marketing approaches and may find it difficult to stop the unwanted contact.
"This decisive action from the OFT sounds a strong warning to other companies thinking of using names for their sites or creating ‘links' in web searches which look and sound like well known debt advice charities. It sends a clear message that this is unacceptable and incompatible with maintaining a credit licence.
"However this is just the start, and in the current economic climate when more people are seeking debt advice, many for the first time, it's vital that the OFT continue to take a hard line with companies deliberately setting out to mislead the public, many of whom may be in unmanageable debt and in urgent need of quality advice.
"Anyone wanting help with debts or other problems should seek advice from a free, impartial debt advice agency, such as your local CAB, our advice website www.adviceguide.org.uk, National Debtline or the Consumer Credit Counselling Service. You don't need to pay for debt advice. Your local CAB will help you work out repayments, negotiate with your creditors and help you claim any benefits you may be entitled to."
